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What are the types of Shares?

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A company may issue different types of shares with different conditions. Generally, a company issues two main types of shares:

Type of SharesFeatures
Ordinary sharesOrdinary shares carry voting rights and entitle shareholders to variable rates of dividends (i.e. payments to shareholders from profits of the company)
Preference sharesPreference shares have preferential rights over ordinary shares, usually in respect of dividend distributions.

The specific rights and benefits of preferential shares are commercial decisions decided by each company. They are contained in the Constitution or resolutions passed during meetings.